Senate leaders would support steel tariffs

WASHINGTON (CNN) --With President Bush poised to decide this week whether to slap steep tariffs on imported steel, the Democratic and GOP leaders of the Senate both indicated Sunday they would support such action to protect domestic steel producers.

"Taking the action that the president is being asked to do is the only way that I see that we're going to save the steel industry," Senate Majority Leader Tom Daschle, D-South Dakota, said on NBC's Meet The Press. "I don't think [Bush] has any choice ... He's got to do it."

"I think he is going to act," said Senate Minority Leader Trent Lott of Mississippi, also on NBC. "I think he will try to find a way to do it that will help save the domestic steel industry while not violating international trade agreements, and it's going to be a delicate balance."

"It is a worry about maintaining a domestic industry, which I think has national security implications," Lott added.

In October, the U.S. International Trade Commission found some steel products "are being imported into the United States in such increased quantities that they are a substantial cause of serious injury or threat of serious injury to the respective U.S. industries."

In December, commissioners sent their recommendations to Bush on how to remedy the injury, which included tariffs of 4 percent to 40 percent, depending on the product involved. The final decision is up to Bush, and Wednesday is the deadline for a decision.

Steel workers and producers have been lobbying the administration to impose the import tariffs, despite the possibility that other steel producing countries, including those in the European Union, could retaliate and start a trade war.

The decision presents a philosophical dilemma for Bush, who has been a strong champion of free trade.

Friday, Sen. John McCain, R-Arizona, and two other GOP senators, Jon Kyl of Arizona and Peter Fitzgerald of Illinois, sent a letter to Bush saying that imposing steel tariffs, which could affect more than 40 countries around the world, would be "ill-advised" and could "jeopardize our ability to negotiate and enforce future trade agreements."

The senators said new tariffs would force U.S. consumers to pay higher prices for steel-based products, and they also cited a Brookings Institution analysis that found higher tariffs could also wipe out 86,000 jobs at U.S. companies that use steel.

"We encourage you not to sacrifice the American consumer and U.S. foreign trade relations in order to protect one domestic industry," the senators said, noting that 12 million people are employed by steel-consuming industries, while only 160,000 work in the steel industry itself.

But Lott, another free trade supporter, said Sunday that U.S. companies face unfair competition from other countries that are dumping government-subsidized products into U.S. markets, while at the same time restricting American companies from entering their markets.

"We're being treated like saps. And I don't think we should take that, frankly," Lott said.

Daschle said if Bush doesn't act, "I think steel is probably something of the past in this country today. I don't think you can sustain the steel industry unless we take this action."

Daschle said he would support the new tariffs of up to 40 percent; Lott said he was "not prepared to say ... that I would be against that."

"I'd want to know all the ramifications, what's involved. I'd want to see what the other alternatives might be," he said.